Chan v Tsui [2005] NSWSC 82

New South Wales Supreme Court

CITATION : Chan v Tsui [2005] NSWSC 82

HEARING DATE(S) : 09/02/2005

JUDGMENT DATE : 11 February 2005

JURISDICTION : Equity Division

JUDGMENT OF : Master Macready at 1

DECISION : Paragraph 75

CATCHWORDS : Family Provision. Application by children of deceased. Real estate passed to eldest son in accordance with Chinese custom. Orders for provision made in favour of plaintiff.

PARTIES : Lily Chan, Janet Tsui, Megan Tsui, Fiona Tsui by her tutor the Protedtive Commissioner of NSW v Raymond Tsui (Estate of the late Tong Sew Tsui)

FILE NUMBER(S) : SC 3812 of 2003

Mr M. Meek for first three plaintiffs COUNSEL : Mr L. Ellision for fourth plaintiff Mr G. McNally & Miss L Chan for defendant

Lee & Lyons for first three plaintiffs SOLICITORS : E.H. Tebbutt & Sons for fourth plaintiff Mallesons Stephen Jaques for defendant

LOWER COURT JURISDICTION :

- 1 - THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER MACREADY

FRIDAY 11 FEBRUARY 2005

3812/03 – LILY CHAN & ORS v RAYMOND TSUI – ESTATE OF TONG SEW TSUI

JUDGMENT

1 MASTER: This is a Family Provision Act claim in respect of the estate of the late Tong Sew Tsui, who died on 12 September 2002, aged seventy-four years. She was survived by, inter alia, her step-son the defendant and her four daughters who are the plaintiffs in the proceedings. WILL 2 She made her last will on 6 November 1978. In the events which have happened the estate was left equally between her four daughters, her step-son Raymond and another child of her husband's first marriage. ESTATE 3 The estate has been reduced to cash and after expenses of administration will amount to $89,000. From this will have to be deducted any costs order in the matter. 4 The defendant's costs so far are $67,114. 5 The fourth plaintiff, Fiona, has been separately represented because she suffers from a disability and her interests are in competition with the other plaintiffs, her sisters. 6 The first to the third plaintiffs' costs are $32,500 and the fourth plaintiff's, $19,000 to $20,000. 7 Even if only the fourth plaintiff succeeds, there will be no estate and the claims can only be satisfied by resorting to notional estate. In this case the notional estate consists of a block of six strata units at Penshurst in which the deceased and her daughters lived. The block is valued at between $1.98 million and $2.04 million. 8 The units were originally purchased by the deceased's husband in November 1975 for $155,000 and registered in the name of the deceased, her husband and her step-son Raymond as joint tenants. Following the various deaths the property has now passed to Raymond. Apparently Raymond, who made no financial contribution (except for working in the business), was placed on the title because it is Chinese custom that the property should pass to the eldest son. FAMILY HISTORY 9 The deceased's husband was born on 8 July 1916 and he married for the first time in 1948. 10 One of his sons of that marriage, who was the defendant Raymond, was born on 1 August 1950. 11 His first wife died in 1954 and he was married to the deceased in 1957. They had four children by that marriage, Lily born 2 October 1958; Janet born 3 November 1962; Megan born 7 March 1966, and Fiona born 6 June 1973. 12 At that time, in the early 1970s, the family was residing in New Guinea and worked as merchants. 13 Raymond married in 1977 and was at that stage still in New Guinea. 14 It was in November 1975 that the Penshurst property was purchased for $155,000 and registered as I mentioned. 15 In 1978 Fiona was diagnosed with Down's Syndrome. 16 The last will of the deceased was 6 November 1978. 17 In 1984 Lily, who by this stage had married Mark, and their children started living in the Penshurst units as well. 18 The deceased's husband died on 16 November 1984. 19 In 1985, Lily and Mark purchased a property at 36 Swan Street, Strathfield, which was rented at the time. 20 Unit 4 was occupied by Megan and Janet from November 1989 to 28 June 1996. 21 By 1992 the last tenants had vacated the Penshurst units. The property has not been let since and has been used basically as a family home for the various members of the family, apart from the defendant. 22 The deceased died on 12 September 2002 and probate was granted on her will in December 2002. 23 After the commencement of the proceedings a management order was made by the Guardianship Tribunal in respect of Fiona and after that orders were made for her separate representation. 24 The first report of the psychologist concerning the position of Fiona was made on 1 December 2003 and in January 2004, for the first time Fiona ventured outside the units. Apparently her mother had kept her hidden for some years since 1991. 25 In March 2004 Lily and Mark contracted with builders for the demolition of the Strathfield house and the construction of a new house on the property. They plan to live there when it is completed within the next few months, together with Janet and Megan. Janet has contributed $110,000 to the purchase and Megan $50,000. They have a caveatable interest in the property and it is agreed that their loan should be repaid within three months if they wish to live in what is, in effect, a family home. 26 There was a further psychologist's report of Michelle Chapman on 30 June 2004 regarding Fiona and I will come back to that in due course. 27 All the plaintiffs are eligible persons. In applications under the Family Provision Act the High Court in Singer v Berghouse (1994) 181 CLR 201 has set out the two stage approach that a Court must take. At page 209 it said the following: "The first question is, was the provision (if any) made for the applicant 'inadequate for (his or her) proper maintenance, education and advancement in life'? The difference between 'adequate' and 'proper' and the interrelationship which exists between 'adequate provision' and 'proper maintenance' etc were explained in Bosch v Perpetual Trustee Co Limited. The determination of the first stage in the two-stage process calls for an assessment of whether the provision (if any) made was inadequate or what, in all the circumstances, was the proper level of maintenance etc appropriate for the applicant having regard, amongst other things, to the applicant's financial position, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty. The determination of the second stage, should it arise, involves similar considerations. Indeed, in the first stage of the process, the court may need to arrive at an assessment of what is the proper level of maintenance and what is adequate provision, in which event, if it becomes necessary to embark upon the second stage of the process, that assessment will largely determine the other which should be made in favour of the applicant. In saying that, we are mindful that there may be some circumstances in which a court could refuse to make an order notwithstanding that the applicant is found to have been left without adequate provision for proper maintenance. Take, for example, a case like Ellis v Leeder where there were no assets from which an order could reasonably be made and making an order could disturb the testator's arrangements to pay creditors." THE SITUATION IN LIFE OF LILY CHAN 28 Lily is aged forty-six, married to Mark and they have four children aged between ten and nineteen. Lily is employed as an executive assistant at the Office of the Protective Commissioner. Mark has casual employment as a storeman and packer. 29 Their income and assets are as follows: (a) Lily's taxable income for the period ended 30 June 2004 was $45,278. (b) Mark earns $800 per week gross. (c) They own the Strathfield property, which has not been valued but it is certainly in excess of $600,000. (d) They have cash resources as at 31 December 2004 of $56,438.20. (e) Lily has superannuation with Rest Superannuation having a present value of $112,602. (f) Mark has a one-third interest in a property at Enfield which is held with his mother and younger sister who live there and presumably will continue to do so. (g) They have a joint time share in a Fiji resort of $22,000. (h) They have liabilities to her sisters of $160,000. They have still to pay $77,377 plus some other unqualified costs to complete the property – driveways have to be made, fences erected and things of that nature. 30 In this case it is clear all the children had a good relationship with the deceased. The three sisters looked after the deceased and they also helped their mother with the care of Fiona. Lily did the cooking and they all helped with shopping. It truly was an extended family arrangement. The whole block of units has been treated as a family home. 31 Lily, from 1992 until the death of the deceased, has paid rates on three units and all the water rates. Raymond seems to have paid them since the date of death. THE SITUATION IN LIFE OF JANET TSUI 32 Janet is aged forty-two and is single. She is employed on contract with the Office of the Protective Commissioner as a project manager and in the role of a computer technical consultant. She had cash resources as at 31 December 2004 of $203,000. Her contract of employment will terminate in about a month's time and she does not know whether it will be extended. She has previously, for instance, from the end of 2002 to September 2003, been unemployed. 33 Details of her income and assets are as follows: (a) Janet had a taxable income for the period ended 30 June 2004 of approximately $175,000. However, her taxable income for the prior year (2003) was $23,455. Clearly her income fluctuates. (b) She had cash resources as at 31 December 2004 of $203,000. (c) She has superannuation with EDS (Australia) worth $199,416.35 as at 30 June 2003. (d) She jointly owns with Megan a time share in a Fiji club resort worth $9,000. (e) She also has a half share with Megan in a property at Ipswich which is a block of land worth $60,000. It was given to them by the deceased in 1995. Her half share is worth $30,000. (f) She is owed $110,000 by Lily in relation to the arrangement with the house. (g) She has some shares of minor value. 34 Janet has made a number of substantial contributions to the estate. She paid land tax assessments between 1995 and 2002 in the sum of $43,030.14. She has paid all the rates for units 2, 3 and 5 since at least 1991. She has paid some fencing costs in 1998 and 1999. She has paid all the electricity for the whole property since 1991 and she has also contributed to the upkeep on the property – gardening, lawn mowing and general repairs. 35 It is illustrative of the way the family lived that the deceased got Janet to contribute by saying that one day one of the units would be hers to live in. THE SITUATION IN LIFE OF MEGAN TSUI 36 Megan is aged thirty-eight and is single. She works as a library network and support services co-ordinator at Burwood Libraries. 37 Her assets and income are as follows: